Wall Street moves past latest ‘panic attack’

It took the Dow just five trading days to recover from its latest “panic attack,” a one-day, 373-point dive May 17 when President Trump’s political troubles were being compared to Watergate and the “I” word — impeachment — was being thrown around.

The 1.8% dent it put in the Dow Jones industrial average made big news. But the panic turned out to be short-lived.

The Dow has moved beyond the scare. The market rebound has also propelled the Standard & Poor’s 500 stock index and tech-stock dominated Nasdaq composite to fresh highs. The buy-the-dip strategy lives on.

Edward Yardeni, chief investment strategist at Yardeni Research, has been “keeping a diary” of these anxiety attacks since the bull market began in early 2009. By his count, the market has suffered 56 of these short-term freakouts. What they all have in common is they turned out to be non-events and were followed by rebound rallies and eventual all-time highs for the market. They all proved to be “buying opportunities.” Only four of the 56 panic attacks resulted in official corrections, or market drops of more than 10% but less than 20%, Yardeni says.

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“When the fears are not realized,” says Yardeni, “you get a relief rally.” Investors are suffering from “anxiety fatigue,” he says. “They seem to be less panic-prone.”.

When asked what it will take for a panic attack to morph into a market heart attack, he said, “It will have to be something that causes a recession. Bear markets are caused by recessions.”.


Dow bounces back after Trump fears prompt worst selloff of year.

If Trump falls, stocks would rebound under Pence.

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